TaxTMI 
TaxTMI 
2009 (7) TMI 1193
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....dhiana was transferred to the Debt Recovery Tribunal-III at Mumbai. Some of the parties to the lis before us are the banks or financial institutions within the purview of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (1993 Act). The others are debtors of such banks or financial institutions. The parties hereto entered into diverse agreements in terms whereof banks or the financial institutions lent money to the debtors. Appellant entered into International Swaps and Derivatives Agreement with the respondent. On 1.11.2006, the appellant and the respondent entered into globally used market standard Master Agreement and Schedule published by ISDA (ISDA Master Agreement) (hereinafter referred to as "Master Agreement") wherein the respondent undertook derivative transactions for hedging or transformation of risk exposure. Under the said Master agreement i.e. the ISDA Agreement including the Schedule thereto, the appellant had entered into ten transactions with the respondent and out of those ten transactions, appellant has unwound (closed at the instance of the appellant at a mutually agreed value) four transactions; one transaction got matured and one ex....
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.... 2008 along with an interim application marked as Interim Application No.125 of 2008 for recovery of dues under the two remaining Foreign Exchange Derivative Contracts dated 13.7.2007. Meanwhile, the order of status quo passed on 5.4.2008 was extended by the learned Civil Judge by an order dated 16.4.2008 till 23.4.2008. In the original application filed by the respondent-bank, the Tribunal by an order dated 22.4.2008 restrained the appellant from alienating, or in any way creating third party interests in its fixed assets in relation to the transactions which were not the subject matter of the suit. Respondent-bank issued two letters on 24.4.2008 to the appellant calling upon it to pay the amount due under the two transactions dated 26.7.2008 and 30.7.2008, and on the same day filed another application before the Debt Recovery Tribunal for recovery of dues under the said two foreign exchange derivative contracts. An application for clarification and/or modification of stay of the order dated 5.4.2008 was filed by the appellant before the civil judge which was heard on 13.5.2008 and 17.5.2008. The matter was adjourned to 29.5.2008. IMPUGNED JUDGMENT Respondent, however, filed....
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....ere the transfer is from one Court to another & DRT being not a Court. d. The power to transfer under the DRT Act is restricted to cases filed by Banks that were pending on the date when the Act came into force and in respect of those cases in which DRT has jurisdiction. (II). Whether the decision of this Court in Indian Bank v. ABS Marine Products (P) Ltd. [(2006) 5 SCC 72], is applicable in the case of transfer of a suit from the Civil Court to the DRT to be tried as a counterclaim, and could a Coordinate two Judge Bench in State Bank of India v. Ranjan Chemicals Ltd. and another, [ (2007) 1 SCC 97 ] have departed from the ratio thereof after noticing it and without referring the matter to a larger bench of Three Judges? (III) Even if the power to transfer exists, in the facts and circumstances of the case, whether it ought to have been exercised. (IV) Whether Article 142 is applicable to direct a transfer from a Civil Court to DRT, especially when: (i) The DRT Act does not bar the jurisdiction of the Civil Court to entertain a suit against a bank and therefore powers under Article 142 ought not to be exercised to have such an effect. (ii) Article 142 is not applicable w....
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....he Debt Recovery Tribunal without plaintiffs' consent resulted in defeating the plaintiff's statutory right to approach the Civil Court and furthermore resulted in ouster of the jurisdiction thereof, neither of which could be ordered or directed without any specific empowering provision in the statute. h) It is well settled legal position that jurisdiction of the Civil Court can only be ousted by a specific and unequivocal statutory provision or by necessary implication. i) Transfer of a suit to a Tribunal having no jurisdiction to decide the issues raised by the plaintiff against the bank and/or financial institution would affect the rights of the appellant. It would furthermore affect its right of appeal, which is a right vested on the plaintiff on the date of filing of the suit. The condition of pre-deposit being one of the conditions for maintaining an appeal before the Appellate Tribunal, in the event such a right of transfer is upheld, the same would amount to burdening the right of appeal with certain conditions which the Parliament never intended to confer. An unfettered right of appeal, which is statutory would thus become fettered, without the in....
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.... as contained in Section 2(g) of the Act means any liability which is claimed as due from any person by a bank during the course of any business activity undertaken by it and would bring within its purview any agreement for enforcement whereof the bank should have no option but to approach the Tribunal only. b) When a particular claim made by a bank is a `debt' within the meaning of the provisions of the Act, it must be determined or adjudicated upon by the Tribunal only and not by a Civil Court. c) The allegation of `Fraud', `Misrepresentation', `Undue Influence' or any other defence, which are available to a borrower to contest the claim of the bank, can be raised before the Tribunal itself and adjudicated upon and determined by the Tribunal. d) As both the suits pending before the Civil Court and/or the High Court as also the petitions pending before the Tribunals arise out of the Master Agreement entered into by and between the parties, the Tribunal having jurisdiction would be entitled to determine the said questions. e) Having regard to the scheme of the Act as also the provisions of the Code, the Tribunal must be given an extended meaning so as to ho....
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....ifficulties faced by banks and financial institutions and suggested remedial measures including changes in law. The Tiwari Committee had also suggested setting up of Special Tribunals for recovery of dues of the banks and financial institutions by following a summary procedure. The setting up of Special Tribunals will not only fulfill a long-felt need, but also will be an important step in the implementation of the Report of Narasimham Committee. Whereas on 30^th September, 1990 more than fifteen lakhs of cases filed by the public sector banks and about 304 cases filed by the financial institutions were pending in various courts, recovery of debts involved more than Rs. 5622 crores in dues of Public Sector Banks and about Rs. 391 crores of dues of the financial institutions. The locking up of such huge amount of public money in litigation prevents proper utilisation and recycling of the funds for the development of the country." Section 2 is the interpretation section. Section 2(g) defines `debt' to mean any liability (inclusive of interest) which is claimed as due from any person by a bank or a financial institution or by a consortium of banks or financial institutions duri....
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....the amounts of debt specified therein. We may, however, notice that Section 19 of the Act was amended twice, - once by Act 1 of 2000 which came into force w.e.f. 17.1.2000 and the second time by Act 30 of 2004 which came into force on and from 11.11.2004. Section 22 provides for the procedure and powers of the Tribunal and Appellate Tribunal, sub-section (1) whereof reads as under: "Section 22 - Procedure and Powers of the Tribunal and the Appellate Tribunal.--(1) The Tribunal and the Appellate Tribunal shall not be bound by the procedure laid down by the Code of Civil Procedure, 1908 (5 of 1908), but shall be guided by the principles of natural justice and, subject to the other provisions of this Act and of any rules, the Tribunal and the Appellate Tribunal shall have powers to regulate their own procedure including the places at which they shall have their sittings." Section 24 provides that the provisions of the Limitation Act, 1963 shall, as far as may be, apply to an application made to a Tribunal. Section 31 provides for transfer of pending cases. It reads, thus : "Section 31. Transfer of pending cases.--(1) Every suit or other proceeding pending before any court imm....
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....ry Civil Court of a grade inferior to that of a District Court and every Court of Small Causes is subordinate to the High Court and District Court." The Code recognizes different courts, the "revenue court" being one of them. Sub-section (2) of Section 5 provides that `revenue court' would not be civil court. Section 9 of the Code empowers the Civil Court to try all suits of civil nature excepting the suits of which their cognizance is either expressly or impliedly barred. Sections 10 and 11 thereof deal with stay of suit and res judicata. Section 12 provides for bar to further suit. The place of suing of a suit is dealt with under Sections 15 to 21. Section 22 provides for power to transfer suits which may be instituted in more than one court. Section 23 of the Code reads as under: "Section 23-To what Court application lies.--(1) Where the several Courts having jurisdiction are subordinate to the same Appellate Court, an application under section 22 shall be made to the Appellate Court. (2) Where such Courts are subordinate to different Appellate Courts but to the same High Court, the applicat....
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.... Exports Ltd. vs. Canara Bank [AIR 1997 Delhi 355] wherein the High Court opined that Debt Recovery Tribunal is not a court but is a Tribunal having been created by a statute vested with a special jurisdiction to try only applications by banks or financial institutions to recover any debt. Although having regard to the provisions contained in clauses (a) to (b) of sub-section (2) of Section 22 of the Act it had all the trappings of a court but it was held not to be a court as such, opining: "38. For reasons more than one, we are of the opinion that a set-off or a counter claim cannot be entertained by a Debt Recovery Tribunal. [...] It has not been conferred with jurisdiction to entertain counter-claim or plea of set-off by reference to the provisions of Order 8 of the CPC. Entertaining a counter-claim or a cross suit or a plea of set-off would not only be without jurisdiction but also an exercise in futility inasmuch as the Tribunal would not adjudicate thereupon nor pass a decree in favor of the defendant against the plaintiff. The law creating Tribunal and conferring jurisdiction on it has not provided for set....
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....al merely because a cross suit or a counter claim has been filed or preferred before the civil court. 2. A cross suit or cross claim or a plea in the nature of set-off cannot be transferred to the Tribunal along with the suit with which it is associated and which is liable to be transferred to the Tribunal. 3. A plea of set-off raised in a suit filed by a bank or financial institution cannot be tried by Tribunal nor would it enable the suit being retained by civil court before it if the subject matter of suit lies within the jurisdictional competence of tribunal otherwise." One of the questions which would arise, thus, for our consideration is whether having regard to the amendment of Section 19 by reason of Act 1 of 2000 and Act 30 of 2004 empowering the Tribunal to determine a claim of set off and/or counter claim, and whether Cofex Exports Ltd. (supra) is still good law. The Debts Recovery Act, as it originally stood, did not contain any provision enabling a defendant in an application filed by the bank/financial institution to claim any set-off or make any counterclaim against them. On that, among other grounds, the Act was held to be unconstitutional by the Delhi H....
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....ried alongwith the Suit No. 272/85 filed by the debtor company? (4) Whether the suit No. 272/85 filed by the debtor company was, in substance, one in the nature of a "counter-claim " against the Bank and was one which also fell within the special Act by reason of Section 19(8) to (11) of the Act (as introduced by Amending Act 1/2000) and if that be so, whether it could still be successfully pleaded by the respondent-company that the pendency of the company's suit 272/85 was a ground for retention of Bank's suit No. 410/85 on the original side of the High Court?" Applying the principles of purposive construction as well as having regard to the statements of objects and reasons of the Act, it was held that if speedy disposal is the purpose of the Act, in the event of the respondent's contention being accepted, the suit would perpetually remain pending on the original side of the Calcutta High Court because of the provisions contained in Section 18 of the Act, stating : "Surely, that would place the Bank in a worse position after the 1993 Act than before inasmuch as before the Act, there was at least the....
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....owever, by sanction advices the bank gave ad hoc sanction upto Rs. 5,00,000/-; whereas according to the bank, the company could utilize the said credit facilities but committed default in paying the amount of advance. The Bank filed an OA for recovery thereof. The Bank also sanctioned a middle term loan and certain other credit facilities but the sanctioned loan was not utilized. The company filed a suit for damages with interest. INDIAN BANK In that case, the following questions were raised : "(i) Whether the subject-matter of the borrower's suit before the High Court and the Bank's application before the Tribunal were inextricably connected? (ii) Whether the provisions of the Debts Recovery Act mandate or require the transfer of an independent suit filed by a borrower against a bank before a civil court to the Tribunal, in the event of the bank filing a recovery application against the borrower before the Tribunal, to be tried as a counterclaim in the bank's application? (iii) Whether the observation in Abhijit that the suit filed by the borrower against the bank has to be transferred to the Tribunal for being tried as a counterclaim in the applications of....
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....an independent suit of a defendant in the bank's application can be deemed to be a counter claim and can be transferred to the Tribunal, opined that the same would apply only where the following conditions are satisfied, in the following words: "25. Though there appears to be some merit in the first respondent's submission, we do not propose to examine that aspect. Suffice it to clarify that the observations in Abhijit that an independent suit of a defendant (in the bank's application) can be deemed to be a counterclaim and can be transferred to the Tribunal, will apply only if the following conditions were satisfied: (i) The subject-matter of the bank's suit, and the suit of the defendant against the bank, should be inextricably connected in the sense that decision in one would affect the decision in the other. (ii) Both parties (the plaintiff in the suit against the bank and the bank) should agree for the independent suit being considered as a counterclaim in the bank's application before the Tribunal, so that both can be heard and disposed of by the Tribunal. In short the decision in Abhijit is dist....
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....#39;s application for transfer of the said suit to the Tribunal was misconceived and not maintainable. The High Court, where the suit for damages was filed by the Company against the Bank, long prior to the Bank filing an application before the Tribunal against the Company, continues to have jurisdiction in regard to the suit and its jurisdiction is not excluded or barred under Section 18 or any other provision of the Debts Recovery Act." The question came up for consideration again in Ranjan Chemicals (supra), wherein this Court, inter alia, held that having regard to the nature of the respective claims arising out of the loan transactions, the Court can exercise its inherent jurisdiction when it was just and proper to order a joint trial of the two causes as there is nothing in the Act to show that the Tribunal is prevented from entertaining the claim made by the borrower in his suit. Purporting to distinguish the decision in Indian Bank (supra), it was held that as the claim of the company in the suit could have been maintained as a counter claim in the application of the bank, there was no warrant for curtailing the power of the court to order joint trial by introducing a re....
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....rranted and justified it. In the light of our conclusion that the claim of the company in the suit could be considered to be a claim for set off and a counter claim within the meaning of Section 19 of the Act, the only question is whether in the interests of justice, convenience of parties and avoidance of multiplicity of proceedings, the suit should be transferred to the Debt Recovery Tribunal for being tried jointly with the application filed by the bank as a cross suit. Obviously, the proceedings before the Debt Recovery Tribunal could not be transferred to the civil Court since that is a proceeding before a Tribunal specially constituted by the Act and the same has to be tried only in the manner provided by that Act and by the Tribunal created by that Act. Therefore, the only other alternative would be to transfer the suit to the Tribunal in case that is found warranted or justified." PRECEDENTIAL VALUE The core question which would arise for our consideration is whether by reason of a transfer the jurisdiction of the civil court can be taken away or otherwise conferred upon the Tribunal? In Indian Bank and Ranjan Chemicals coordinate bench of this court took somewhat dif....
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....lf the aforementioned question, should have considered the decision of a coordinate bench in Indian Bank (supra) in that perspective. It must furthermore be noticed that Indian Bank (supra) was clarifying Abhijit Tea (supra). Conditions laid down in paragraph 25 of Indian Bank (supra) must also, therefore, be read in that context as otherwise, the same would lead to misreading and misinterpreting the judgment. We may notice some decisions of this court as regards the binding nature of the precedents of a coordinate Bench. In Union of India v. Raghubir Singh, [ (1989) 2 SCC 754 ], this Court has held :- "27. [...] It is in order to guard against the possibility of inconsistent decisions on points of law by different Division Benches that the Rule has been evolved, in order to promote consistency and certainty in the development of the law and its contemporary status, that the statement of the law by a Division Bench is considered binding on a Division Bench of the same or lesser number of Judges. This principle has been followed in India by several generations of Judges. &....
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....transfer under the DRT Act from a Court to Tribunal. The respondents, therefore, do not and cannot rely on any of the provisions of the DRT Act for contending that the Court had any other power to direct transfer. In Indian Bank (supra) this court noted thus: "15. [...] There is no provision in the Act for transfer of suits and proceedings, except section 31 which relates to suit/proceedings by a bank or financial institution for recovery of a debt. It is evident from section 31 that only those cases and proceedings (for recovery of debts due to banks and financial institutions) which were pending before any court immediately before the date of establishment of a tribunal under the Debts Recovery Act stood transferred, to the tribunal" In Raghunath Rai Bareja & Anr. v. Punjab National Bank & Anr, (2007) 2 SCC 230 this court opined: "19. [...] Apart from section 31, there is no other provision for transferring a suit or other proceedings pending before any other court to tribunal. [...] 28. [...] whatever power there are of transfer of proceedings to the tribunal are contained in section 31 of the RBD Act, and no ....
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....d to be merely a procedural or machinery provision. It was held that no order of transfer can be made thereunder, stating: "...If the case is covered by Section 25 of the Code, it is only that section which will apply for both the purposes, namely, for the purpose of making application and also for the purpose of effecting transfer. On the contrary, reading of sub- section (3) of Section 23 of the Code in the manner suggested by the learned counsel for the respondent - wife would result in allowing inroad and encroachment on the power of this Court not intended by Parliament. Section 23, therefore, in our considered view, must be read subject to Section 25 of the Code. The decisions taking a contrary view do not lay down correct law. We, therefore, overrule them..." WHETHER TRIBUNAL IS A CIVIL COURT The terms "Tribunal", "court" and the "civil court" have been used in the Code differently. All "courts" are "Tribunals" but all "Tribunals" are not "courts". Similarly all "civil courts" are "courts" but all "courts" are not "civil courts." It is not much in dispute that the broad distinction between a "court" and a "Tribunal" is whereas the decision of the "court" is final the d....
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....t the DRT is not a court and it exercises powers of a civil court only in respect of limited matters. Civil Courts are constituted under statutes, like Bengal, Agra and Assam Civil Courts Act, 1887. Pecuniary and territorial jurisdiction of the civil courts are fixed in terms thereof. Jurisdiction to determine subject matter of suit, however, emanates from Section 9 of the Code. We would revert to the interpretation of the said provision vis-`-vis the provisions of the Act a little later. In P. Sarathy v. State Bank of India [(2000) 5 SCC 355], this Court opined that although there exists a distinction between a court and a civil court, but held that a Tribunal which has not merely the trappings of a court but has also the power to give a decision or a judgment which has finality and authoritativeness will be court within the meaning of Section 14 of the Limitation Act, 1963. In the context of Section 29(2) of the Limitation Act, 1963 the term `court' is considered to be of wide import. However, there again even for that purpose exists a distinction between a court and the civil court. In P. Sarathy v. State Bank of India, (Supra) this Court has held :- "12. It will be....
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....Code of Civil Procedure had not been adverted to. The power of transfer under Section 25 of the Code was assumed sub silento without any discussion. We are in agreement with the submissions of learned senior counsel Dr. Singhvi and Shri Rakesh Dwividi that those decisions are clearly distinguishable on the facts of each case as they relate to transfer from one Tribunal to another and not from a civil court to a Tribunal. It has also been pointed out by Mr. Dwividi that reliance placed by Mr. Desai on the cases cited by him and referred to herein is misleading as the Head Notes of those cases are misleading. He argues that though the SCC refers to Section 25 of the CPC therein in regard to the power of transfer of the court, however, the text of the judgments is silent in regard thereto. We may hereinafter may make reference to the Head Notes of a few of them. The SCC Head Note to Kahlon (supra) reads as under: "Civil Procedure Code, 1908 - S. 25 - Motor accidents claim case filed by petitioner in town of place of work - due to 100 per cent disablement due to accident, petitioner quitting job and shifting back to home town - transfer of claim case to home town of petitioner, allo....
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....ll settled. The learned Judges imported the observations which were made in Kashmira Singh v. State of M.P. in the context of evidentiary value of the confession of co-accused and applied them to the case of retracted confession. It appears that the learned Judges went by the headnote in the AIR6 which opens up with the sentence: (AIR p. 159) "The confession of an accused person...." However, in the text of the judgment it is crystal clear that the entire discussion and the statement of law was only with reference to the confession of the co-accused. While clarifying that the confession of the co- accused is not evidence in the ordinary sense of the term as pointed out by the Privy Council, this Court observed in Kashmira Singh case that such a confession cannot be made the foundation of a conviction and can only be used in support of other evidence. 22. In Chimanlal case the learned Judges, after referring to the headnote portion of Kashmira Singh in AIR 1952 SC 159 proceeded to apply the test applicable to the confession of the co-accused to a case of retracted confession. 23. In view of the error in comprehending the scope of the decision in Kashmira Singh case the decisio....
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.... other provisions of the Code of Civil Procedure like interrogatories, discoveries of documents and admission need not be gone into. Taking recourse to such proceedings would be an exception. Entire focus of the proceedings before the Debt Recovery Tribunal centers round the legally recoverable dues of the bank. Should we adopt the principle of purposive interpretation so as to hold that the DRT would be a Civil Court? We have noticed hereinbefore that Civil Courts are created under different Acts. They have their own hierarchy. They necessarily are subordinate to the High Court. The appeals from their judgment will lie before a superior court. The High Court is entitled to exercise its power of revision as also superintendence over the said courts. For the aforementioned purpose, we must bear in mind the distinction between two types of courts, viz., civil courts and the courts trying disputes of civil nature. Only because a court or a tribunal is entitled to determine an issue involving civil nature, the same by itself would not lead to the conclusion that it is a civil court. For the said purpose, as noticed hereinbefore, a legal fiction is required to be created before it....
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.... and orders of the Tribunal. The principles of purposive construction, therefore, in our opinion, are not attracted in the instant case. Had the Parliament intended to make the Tribunals civil courts, a legal fiction could have been raised. There are statues like the Andhra Pradesh Land Grabbing Act where such a legal fiction has been raised. {See V. Laxminarasamma v. A. Yadaiah (Dead) and Ors., [2009 (3) SCALE 685]}. Whereas the doctrine of purposive construction is a salutary principle, the same cannot be extended to a case which would lead to an anomaly. It can inter alia be resorted to only when difficulty or doubt arises on account of ambiguity. It is to be preferred when object and purpose of the Act is required to be promoted. For the foregoing reasons, we are of the opinion that the decisions of this Court laying down the principles of purposive interpretation, whereupon strong reliance has been placed by Mr. Divan, viz., New India Assurance Company Ltd. v Nusli Neville Wadia and Another [(2008) 3 SCC 279], Dilip S. Dahanukar v. Kotak Mahindra Co. Ltd. and Another [(2007) 6 SCC 528], South Eastern Coalfields Ltd. v. CCET, MP [(2006) 6 SCC 340] and Uco Bank v. Rajinder....
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....n in respect of set off or counter-claim, having regard to the provisions of sub-sections (6) to (11) of Section 19 of the Act, it is evident :- a) That the proceedings must be initiated by the bank b) Some species of the remedy as provided therein would be available therefor. c) In terms of sub-section (11) of Section 19, the bank or the financial institution is at liberty to send a borrower out of the forum. d) In terms of the provisions of the Act, thus, the claim of the borrower is excluded and not included. e) In the event the bank withdraws his claim the counter-claim would not survive which may be contrasted with Rule 6 of Order VIII of the Code. f) Sub-section (9) of Section 19 of the Act in relation thereto has a limited application. g) The claim petition by the bank or the financial institution must relate to a lending/borrowing transaction between a bank or the financial institution and the borrower. h) The banks or the financial institutions, thus, have a primacy in respect of the proceedings before the Tribunal. i) An order of injunction, attachment or appointment of a receiver can be initiated only at the instance of the bank or the financial institu....
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....AIR 1997 Kerala 89], the High Court has held :- "In view of the discussions it is clear that even though Rent Control Court under the Rent Control Act is a `Court' and is not a persona designate it is not a Civil Court for the purpose for the provisions of S. 115 of the CPC. Therefore, against an interim order of the Rent Control Court no revision petition will lie. We are not considering whether an appeal will lie against the interim order in question or whether a petition under Art. 227 of the Constitution is maintainable." In M/s. Brooke Bond India Ltd. v. Union of India and others, [AIR 2001 AP 526 ] the Andhra Pradesh High Court has held:- "The contention urged by the counsel for appellant that the Railway Claims Tribunal is a civil Court cannot be accepted. Merely because Section 18(3) of the Act provides that the Claims Tribunal, for the purpose of discharging the functions under the Act, shall have the same powers as are vested in the civil Court under the Code of Civil Procedure, 1908 and S. 25 provides that the proceedings before the Tribunal shall be deemed to be `judicial proceedings'....
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.... laws. The hierarchy of the Court as established under Bengal, Agra and Assam Civil Court Act are Courts in respect of which the Code of Civil Procedure is applicable and the jurisdiction is open. Section 4 and 5 CPC also spells out Courts in the context of applicability of CPC. Under Section 9 of CPC. All suits of civil nature are triable by a Court unless cognizance of a particular kind of suit is expressly or impliedly barred. There are certain kinds of suits which are triable by revenue Courts or Provincial or Presidencies Small Cause Court. The subordination of the Courts is determined under Section 3, CPC on the basis of the provisions of Code of Civil Procedure applicable to it having regard to the provisions contained in Bengal, Agra and Assam Civil Courts Act." In Greater Bombay Coop. Bank Ltd. v. United Yarn Tex (P) Ltd.,[ (2007) 6 SCC 236 ], this Court has held :- "76. Section 31 of the RDB Act clearly refers to transfer of "every suit or other proceeding pending before any court". The word "court", in the context of the RDB Act, signifies "civil court". It is clear that the Registrar, or an officer designated by him or an arbitrator under Sections 61, 62, 70 and 71 o....
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....jurisdiction of the civil court is barred in relation only to applications from banks and financial institutions for recovery of debts due to such banks and financial institutions. A civil court is entitled to decide the respective claims of the parties in a suit. It must come within the purview of the hierarchy of courts as indicated in Section 3 of the Code. It will have jurisdiction to determine all disputes of civil nature unless the same is barred expressly by a statute or by necessary implication. Although some arguments have been advanced before us whether having regard to the provisions of Sections 17 and 18 of the Act the civil court jurisdiction is completely ousted, we are of the view that the jurisdiction of the civil court would be ousted only in respect of the matters contained in Section 18 which has a direct co-relation with Section 17 thereof, that is to say that the matter must relate to a debt payable to a bank or a financial institution. The application before the Tribunal would lie only at the instance of the bank or the financial institution for the recovery of its debt. It must further be noted in this respect that had the jurisdiction of the civil courts bee....
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....ether remedies normally associated with actions in civil courts are prescribed by the said statute or not. (7) An exclusion of the jurisdiction of the civil court is not readily to be inferred unless the conditions above set down apply." In Dwarka Prasad Agarwal v. Ramesh Chander Agarwal, [(2003) 6 SCC 220] "19. A bare perusal of the aforementioned provisions leaves no manner of doubt that thereby the jurisdiction of the civil court has not been ousted. The civil court, in the instant case, was concerned with the rival claims of the parties as to whether one party has illegally been dispossessed by the other or not. Such a suit, apart from the general law, would also be maintainable in terms of Section 6 of the Specific Relief Act, 1963. In such matters the court would not be concerned even with the question as to the title/ownership of the property." Therein five principles were laid down stating :- "22. The dispute between the parties was eminently a civil dispute and not a dispute under the provisions of the Companies Act. Section 9 of the Co....
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....s under: (SCC pp. 650-51, paras 38-40) 39[41]. ... The power to create or enlarge jurisdiction is legislative in character.... Parliament alone can do it by law and no court, whether superior or inferior or both combined can enlarge the jurisdiction of a court or divest a person of his rights of revision and appeal. The Act, although, was enacted for a specific purpose but having regard to the exclusion of jurisdiction expressly provided for in Sections 17 and 18 of the Act, it is difficult to hold that a civil court's jurisdiction is completely ousted. Indisputably the banks and the financial institutions for the purpose of enforcement of their claim for a sum below Rs. 10 lakhs would have to file civil suits before the civil courts. It is only for the claims of the banks and the financial institutions above the aforementioned sum that they have to approach the Debt Recovery Tribunal. It is also without any cavil that the banks and the financial institutions, keeping in view the provisions of Sections 17 and 18 of the Act, are necessarily required to file their claim petitions before the Tribunal. The converse is not true. Debtors can file their claims of set off o....
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....o laws occupy the same field. The court then referred to Sutherland on Statutory Construction (Vol. 1 3rd edn., p. 486) on the question of "repeal of special and local statutes by general statutes". It was further stated :- "46. What is important from our point of view, is the view taken in that case that when repugnancy is alleged between the two statutes, it is necessary to examine whether the two laws occupy the same field, whether the new or the later statute covers the entire subject matter of the old, whether legislature intended to lay down an exhaustive code in respect of the subject matter covered by the earlier law so as to replace it in its entirety and whether the earlier special statute can be construed as remaining in effect as a qualification of or exception to the later general law, since the new statute is enacted knowing fully well the existence of the earlier law and yet it has not repealed it expressly. The decision further lays down that for examining whether the two statutes cover the same subject matter, what is necessary to examine is the scope and the object of the two enactments, and that has ....
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....remedy of summary and speedy trial by itself would not be sufficient to oust the jurisdiction of the civil court. Had the intention of the Parliament been so, it could have expressly said so. Casus omissus, as is well known, cannot be supplied. VESTED RIGHT OF APPEAL Another aspect of the matter also cannot be lost sight of. A plaintiff of a suit will have a vested right of appeal. The said right would be determined keeping in view the date of filing of the suit. Such a right of appeal must expressly be taken away. An appeal is the "right of entering a superior court, and invoking its aid and interposition to redress the error of the court below" and "though procedure does surround an appeal the central idea is a right". The right of appeal has been recognized by judicial decisions as a right which vests in a suitor at the time of institution of original proceedings. The Privy Council in Colonial Sugar Refining Company v. Irving, [(1905) AC 369 (PC)] noted that " to deprive a suitor in a pending action of an appeal to a superior tribunal which belonged to him as of right, is a very different thing from regulating procedure" When a person files a civil suit his right to prosec....
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....the awarded amount is required to be deposited, subject of course, to an order to the contrary, which may be passed by the Debt Recovery Appellate Tribunal. Such a right of conditional appeal, in our opinion, curtails party's right to maintain an appeal as a matter of right. While we say so, we are not oblivious of the fact that in terms of Order XLI Rule 1 of the Code, in the event of passing of a money decree the amount is required to be deposited. The said provision, however, has been held to be directory. Order XLI Rule 1 is required to be read with Order XLI Rule 5 thereof. {See Sihor Nagar Palika Bureau v. Bhabhlubhai Virabhai & Co., [(2005) 4 SCC 1 ], Malwa Strips Pvt. Ltd. v. Jyoti Limited [(2009) 2 SCC 426]} More recently in Transmission Corporation of A.P. v. Ch. Prabhakar and Ors., (2004) 5 SCC 551 this court similarly opined: "....The right of appeal is a substantive right which is really a step in series of proceedings all connected by an intrinsic unity and is to be regarded as one legal proceeding and further being a vested right such a right to enter the superior court accrues to the litigant and exists as on and from the date the lis commences...." A civi....
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.... to appoint a Commissioner to seize accounts books in the possession of the plaintiff upon an application by the defendant that his apprehension that they would be tampered with, stating: "10. The defendants had no rights to these account books. They could not lay any claim to them. They applied for the seizure of these books because they apprehended that the plaintiff might make such entries in those account books which could go against the case they were setting up in Court. The defendants' request really amounted to the Court's collecting documentary evidence which the defendants considered to be in their favour at that point of time. It is no business of the Court to collect evidence for a party or even to protect the rival party from the evil consequences of making forged entries in those account books. If the plaintiff does forge entries and uses forged entries as evidence in the case, the defendants would have ample opportunity to dispute those entries and to prove them forgeries. 11. We are therefore of opinion that the Additional Munsif had no inherent power to pass the order appointing a Commissioner to seize the plaintiff's account books. The order appoint....
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....and Anr. v. Bal Mukund Bairwa, 2009 (2) SCALE 428] A debtor having regard to the provisions of the DRT Act would not be entitled to maintain an action before the Tribunal. If a suit is to be transferred from a civil court to a tribunal, he would loose some rights including the right to prefer an appeal before a higher court in terms of Sections 96 and 100 of the Code of Civil Procedure. Mr. Diwan, however, has strongly placed reliance upon Union of India and Another v. Delhi High Court Bar Association and Others [(2002) 4 SCC 275] wherein it was observed that the tribunals have become an essential part of the judicial system in the country. Such observations were made keeping in view the provisions of Articles 323A and 323B of the Constitution of India. The logical extension of the said observations would not lead to a conclusion that the tribunals are either civil courts or this Court would be entitled to exercise its inherent power for transfer of a civil suit to a tribunal. We may place on record that in Durgesh Sharma (supra) this Court has clearly held that the provisions of Sections 22 to 25 of the Code of Civil Procedure are exhaustive in nature. If that be so, inheren....
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....f India and Others [(2007) 5 SCC 120]. Both the aforementioned cases have been determined by a Bench which has decided Ranjan Chemicals (supra). Those cases related to the contentions raised before the Banking Ombudsman. The Bench held that the appellants therein could make all their claims before the DRT while defending the claim of the bank, including the ones he had put forward before the Banking Ombudsman. We are not concerned with such a contention herein. In any event, in view of our findings that we are bound to follow Indian Bank (supra), this argument has no force. ARTICLE 142 ISSUE Indisputably, the power of this Court under Articles 139A and 142 of the Constitution of India is a wide and extensive one. This Court may resort thereto to do complete justice. While doing so, this Court would be entitled to impose conditions. Whether such a power should be exercised or not is the question. The principal submission made on behalf of the Bank is that the suit is pre-emptive in nature. It may be so but then the banks and the financial institutions have their own remedies. As adequate remedy is available to them in law, ordinarily, the same should be directed to be fo....